Tesla's Bizarre Conference Call: Musk Went After Analysts and His Own Execs

Mike Mish Shedlock

Tesla's conference call on Wednesday gets a 10-bowl popcorn rating.

10-Bowl Rating

Tesla CEO Elon Musk's performance on Wednesday's earnings call was bizarre and contentious. Musk attacked after everyone. After hours, shares of Tesla took a hit: Elon Musk acted like a jerk, and Tesla stock paid the price.

Tesla Inc. Chief Executive Elon Musk held a long, odd earnings conference call Wednesday in which he insulted analysts, the media, federal regulators and people who died behind the wheel of his cars, and then told anyone concerned about volatility not to invest in his company.

Unsurprisingly, volatility ensued, as Tesla (TSLA) shares dropped quickly during an increasingly bizarre call with the very analysts and media whom Musk attacked.

Tesla on Wednesday disclosed the largest quarterly loss in the history of a company known far and wide for losing vast sums of money, with a net loss of almost $785 million. The numbers still managed to beat expectations that have been repeatedly lowered for more than a year, which led Musk to take a victory lap on Twitter after losing more than three quarters of a billion dollars in three months.

It only got weirder from there. In his conference-call introduction, Musk confused per-week and per-day production figures, described a “super complicated” robot Tesla designed and built before realizing it could not perform its unnecessary function, then mentioned offhandedly that he planned to restructure the company this month — a disclosure he never revisited to provide more information.

When the question-and-answer session started, Musk turned vitriolic, and not even his fellow executives were safe. After Chief Financial Officer Deepak Ahuja referred to Tesla as “best in class” for batteries while responding to an analyst query, he was interrupted by Musk.

“The best. It is not a class,” Musk interjected. “Yes, we’re the best. Sorry,” Ahuja replied. “The best in a class of one,” Musk made sure to point out.

Soon, Musk turned his ire toward the financial analysts who were asking the questions. When Bernstein analyst Toni Sacconaghi attempted to ask about capital-expenditure spending and the money needed, Musk cut him off by yelling “Next!” When RBC Capital Markets analyst Joseph Spak then asked how many people with Model 3 reservations were actually taking delivery of their cars, Musk declined to answer any more “boring,” “dry” questions. “You’re killing me,” he said.

By the time Baird analyst Ben Kallo took the phone more than an hour into the call, the apprehension was thick. Kallo took more time with an introduction to his question, which gave reasoning for why Musk should answer it and not be angry at him, than actually asking the question. Musk did not really answer his question, instead complaining about leaks to the media and his own investors.

Wow

There's very little I can add to what's already been said. So let's take a look at what has been said.

Cartoon of the Day

FerroTV

https://twitter.com/FerroTV/status/991810676007022592

Mark B. Spiegel-markbspiegel

https://twitter.com/markbspiegel/status/991780933513764864

Rudolf E. Havenstein-RudyHavenstein

https://twitter.com/RudyHavenstein/status/991855840733757440

Escaping Alpha-escapingalpha

https://twitter.com/escapingalpha/status/991795930025398272

Tom Randall-tsrandall

https://twitter.com/tsrandall/status/991821775280529408

Is This Guy from an Alternate Universe?

https://twitter.com/GerberKawasaki/status/991786010756333568

Tesla Tweet of the Day-TalesFromTheFuture-talesftf

https://twitter.com/talesftf/status/991805717601488896

That Tweet precisely epitomizes my 10-bowl popcorn rating.

Mike "Mish" Shedlock

Comments (13)
No. 1-13
mark0f0
mark0f0

The Board seriously needs to address the high probability of Elon Musk's mental illness getting in the way of his 'leadership' of the company and its relationships with the owners of the business.

thimk
thimk

Elon has about $800 mill of customer deposits.

caradoc-again
caradoc-again

Butterfly wings calling a turn over of the market?

sachvik
sachvik

This is the common story of Silicon Valley high-flyers focusing on consumers (B2C, not B2B)... Facebook, Uber - anyone?
Grow at any cost, until the real cost becomes apparent to everyone else. Then the charismatic founder leaves (after pocketing a very healthy sum), an experienced team (read adults) is put in place, who patiently works through boring items like profitability... The only question is how long it takes?
PS: The founder goes out to repeat the formula somewhere else. Rinse and repeat.

MorrisWR
MorrisWR

Bitcoin investment looks better than ever if you compare it to owning Tesla shares.

Snow_Dog
Snow_Dog

“Grow at any cost, until the real cost becomes apparent to everyone else. Then the charismatic founder leaves (after pocketing a very healthy sum), an experienced team (read adults) is put in place, who patiently works through boring items like profitability.”
~ sachvik

Yep.
It’s called “move fast and break stuff” and my 4 yr old nephew does it a lot if you fail for even a minute to keep an eye on him.

Of course, he didn’t name himself after a tortured misunderstood genius and so instead of feigned indignation and impatience with your questioning of him, he simply sits by himself and pouts. We expect him to be much better by the time he is 5 or 6.

KidHorn
KidHorn

Tesla is in it's own class. No properly run company would have attempted what they did simply because the numbers didn't add up. Now that electric car production costs have come down, other car companies will swoop in and start producing competitive cars in Tesla's space. If Tesla couldn't succeed when they basically had a monopoly on high end electric vehicles, what's going to happen when every car company is offering electric SUVs, pickups, luxury sedans, etc... ? They're toast.

Roger_Ramjet
Roger_Ramjet

Despite this train wreck, I still see headlines such as this one presented on MarketWatch, “Look past the Tesla noise and buy shares cheap while you can: Baird” Morgan Stanley’s analyst still maintains a $376 price target. While everyone talked about the bizarre conference call, it doesn’t look like there were many (if any) changes to analyst recommendations or target prices. The “cult” following still seems to be firmly entrenched.

Rdog17
Rdog17

Just another example of the Fleecing of America...

Grumblenose
Grumblenose

Enron Musk and his Gigglefactory... Just read that VW is investing $41B in EV batteries over the next few years. Real car companies will soon be all over the BEV market like a rash. Tesla should have kept to the luxury market where they could succeed as a niche player.

flubber
flubber

A company to consider in battery production is Ionic Materials......privately held by venture capitalists.......extremely interesting technology that solves the explosive flammability issues that plague lithium-ion batteries.

abend237-04
abend237-04

I agree with Musk, stay away and stop asking all those boring questions. I also agree on the volatility issue...stay away until it settles down. Post-chapter, this could be a nice little $5.00 stock, assuming the bankruptcy judge owns a Model S.

Clintonstain
Clintonstain

This is Amber Heard’s fault as Musk’s behavior clearly is the result of an untreated syphilitic infection.


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